What changed in this filing

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Item 1. Business

2022-11-18 compared with 2021-11-17 · 155 added, 319 removed, 269 unchanged (64% of the section changed)

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As long-term investors, having substantial experience in a variety of industries, our intent is to continue the growth and strengthening of our existing businesses, and to diversify further through investments in our businesses and through acquisitions.

Over the past four years, we have undertaken a series of transformative transactions.

Over the past five years, we have undertaken a series of transformative transactions.

We divested our specialty plastics business in 2018 to focus on our core markets and improve our free cash flow conversion.

We expanded the scope of The AMES Companies, Inc.

("AMES") and Clopay Corporation ("Clopay") through the acquisitions of ClosetMaid, LLC ("ClosetMaid") and CornellCookson, Inc.

("CornellCookson"), respectively.

CornellCookson has been integrated into Clopay, so that our leading company in residential garage doors and sectional commercial doors now includes a leading manufacturer of rolling steel doors and grille products.

ClosetMaid was combined with AMES, and we established an integrated headquarters for AMES in Orlando, Florida.

AMES is now positioned to fulfill its mission of Bringing Brands Together™ with the leading brands in home and garage organization, outdoor décor, and lawn, garden and cleaning tools.

On September 27, 2021, we announced we are exploring strategic alternatives, including a sale, for our Defense Electronics ("DE") segment, which consists of our Telephonics Corporation subsidiary.

As a result, Griffon classified the results of operations of the Telephonics business as a discontinued operation in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operation as held for sale in the consolidated balance sheets.

In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") on January 24, 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018.

In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc.

("CornellCookson") in 2018, which has been integrated into Clopay Corporation ("Clopay"), creating a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products under brands that include Clopay, Ideal, Cornell and Cookson.

We established an integrated headquarters for CPP in Orlando, Florida for our portfolio of leading brands that includes AMES, Hunter, True Temper and ClosetMaid.

CPP is well positioned to fulfill its ongoing mission of Bringing Brands Together™ with the leading brands in consumer and professional tools;

residential, industrial and commercial fans;

home storage and organization products;

and products that enhance indoor and outdoor lifestyles.

On May 16, 2022, Griffon announced that its Board of Directors initiated a process to review a comprehensive range of strategic alternatives to maximize shareholder value including a sale, merger, divestiture, recapitalization or other strategic transaction.

This process is active and discussions with potential counterparties are ongoing with respect to a number of these options.

The Committee on Strategic Considerations, a committee comprised of independent directors who serve on Griffon's Board, is overseeing the process and working with Griffon's management and Goldman Sachs & Co, LLC.

the Company's financial advisor.

There is no assurance that the process will result in any transaction being entered into or consummated.

On September 27, 2021, we announced we were exploring strategic alternatives for our Defense Electronics ("DE") segment, which consisted of our Telephonics Corporation ("Telephonics") subsidiary.

On June 27, 2022, we completed the sale of Telephonics to TTM Technologies, Inc.

(NASDAQ:TTMI) ("TTM") for $330,000 in cash, excluding customary post-closing adjustments, primarily related to working capital.

Griffon classified the results of operations of our Telephonics business as a discontinued operation in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operation in the consolidated balance sheets.

Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise.

On December 17, 2021, Griffon entered into a definitive agreement to acquire Hunter, a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of $845,000 and completed the acquisition on January 24, 2022.

Hunter, part of our CPP segment, complements and diversifies our portfolio of leading consumer brands and products.

We financed the acquisition of Hunter with a new $800,000 seven-year Term Loan B facility;

we used a combination of cash on hand and revolver borrowings to fund the balance of the purchase price and related acquisition and debt expenditures.

Update of COVID-19 on Our Business

The health and safety of our employees, our customers and their families is a high priority for Griffon.

The health and safety of our employees, our customers and their families is always a high priority for Griffon.

As of the date of this filing, all of Griffon's facilities are fully operational.

We have implemented a variety of new policies and procedures, including additional cleaning, social distancing, staggered shifts and prohibiting or significantly restricting on-site visitors, to minimize the risk to our employees of contracting COVID-19.

In the United States, we manufacture a substantial majority of the products that we sell.

While this helps mitigate the effects of global supplier and transportation disruptions, we are still impacted by these disruptions.

Our supply chain has experienced certain disruptions which, together with other factors such as a shortage of labor, has resulted in longer delivery lead times and restricted manufacturing capacity for certain of our products.

Commodity prices have increased during COVID-19 and may continue to increase, and we may not be able to pass off all or any of such price increases to our customers on a timely basis, or at all.

It is difficult to predict whether the supply chain disruptions that impact us will improve, worsen or remain the same in the near term.

Our suppliers could be required by government authorities to temporarily cease operations in accordance with the various restrictions discussed above;

might be limited in their production capacity due to complying with restrictions relating to the operation of businesses during the

COVID-19 pandemic;

Our supply chain experienced and, to some extent, is still recovering from certain disruptions which, together with other factors such as a shortage of labor, resulted in longer delivery lead times and restricted manufacturing capacity for certain of our products.

When COVID-19 struck, we implemented a variety of new policies and procedures, including additional cleaning, social distancing, staggered shifts and prohibiting or significantly restricting on-site visitors, to minimize the risk to our employees of contracting COVID-19.

While many of these precautions have been relaxed or eliminated as the health risk of COVID-19 has decreased, we would not hesitate to reinstitute and/or modify these policies and procedures as necessary should the health risk return to an unacceptable level.

In such event, our businesses or our suppliers could be required by government authorities to temporarily cease operations;

might be limited in their production capacity due to complying with restrictions relating to the operation of businesses to mitigate the impacts of COVID-19;

or could suffer their own supply chain disruptions, impacting their ability to continue to supply us with the quantity of materials required by us.

During fiscal 2021 and through the date of this filing, all of our businesses have experienced normal or better order patterns compared with pre-pandemic levels.

executive orders issued in 2020 which required all workers to remain at home unless their work is critical, essential, or life-sustaining, have been lifted.

Regardless, we believe that, based on the various standards published to date, the work our employees are performing are either critical, essential and/or life-sustaining for the following reasons:

1) HBP residential and commercial garage doors, rolling steel doors and related products that (a) provide protection and support for the efficient and safe movement of people, goods, and equipment in and out of residential and commercial facilities, (b) help prevent fires from spreading from one location to another, and (c) protect warehouses and homes, and their contents, from damage caused by strong weather events such as hurricanes and tornadoes;

and 2) CPP tools and storage products provide critical support for the national infrastructure including construction, maintenance, manufacturing and natural disaster recovery, and is part of the essential supply base to many of its largest customers including Home Depot, Lowe's and Menards.

Our AMES international facilities are currently fully operational, as they meet the applicable standards in their respective countries.

On September 9, 2021, President Biden announced a proposed new rule requiring that all employers with at least 100 employees require that their employees be fully vaccinated or tested weekly.

Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an emergency temporary standard regulation to carry out this mandate.

On November 6, 2021, the Unites States Court of Appeals for the Fifth Circuit granted a stay of the emergency temporary standard, and on November 12, 2021 the Court upheld its stay and barred OSHA from enforcing the mandate “pending adequate judicial review” of a motion for permanent injunction.

At this time, it is unclear, among other things, when the vaccine mandate will go into effect (or if it will go into effect at all);

whether it will apply to all employees or only to employees who work in the office;

and how compliance will be documented.

As a company with more than 100 employees, it is anticipated that, should the vaccine mandate go into effect, we would be subject to the OSHA regulation concerning COVID-19 vaccination and the vaccine mandate.

Should the mandate apply to us, we may be required to implement a requirement that all of our employees get vaccinated, subject to limited exceptions.

At this time, it is not possible to predict the impact that a vaccine mandate, or a vaccine requirement should we adopt one, will have on us or on our workforce.

Any vaccine requirement or vaccine mandate, if implemented, may result in employee attrition, which could materially and adversely affect our business and results of operations.

We will continue to actively monitor the situation and may take actions that impact our operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

While we are unable to determine or predict the nature, duration or scope of the overall impact COVID-19 will have on our businesses, results of operations, liquidity or capital resources, we believe it is important to discuss where our company stands today, how we have responded (and will continue to respond) to COVID 19 and how our operations and financial condition may change as COVID-19 evolves.

Griffon believes it has adequate liquidity to invest in its existing businesses and execute its business plan, while managing its capital structure on both a short-term and long-term basis.

In January 2020, Griffon increased total borrowing capacity under its revolving credit facility ("Credit Agreement") by $50,000, to $400,000 (of which $370,927 was available at September 30, 2021), and extended maturity of the facility to 2025.

In addition, the Credit Agreement has a $100,000 accordion feature (subject to lender consent).

During 2020, Griffon refinanced its $1,000,000 of senior notes due 2022 with new 5.75% senior notes with a maturity of 2028.

In August 2020, we completed a public offering of 8,700,000 shares of our common stock for total net proceeds of $178,165 (the "Public Offering");

a portion of these net proceeds were used to repay outstanding borrowing under our Credit Agreement.

At September 30, 2021 Griffon had cash and equivalents of $248,653.

We will continue to actively monitor the situation and may take further actions that impact our operations as may be required by federal, state or local authorities or that we determine is in the best interests of our employees, customers, suppliers and shareholders.

While we are unable to determine or predict the nature, duration or scope of the overall impact the COVID-19 pandemic will have on our businesses, results of operations, liquidity or capital resources, we believe it is important to discuss where our company stands today, how our response to COVID-19 is progressing and how our operations and financial condition may change as the fight against COVID-19 progresses.

Business Highlights

As noted above, Griffon is exploring strategic alternatives, including a sale, for its Defense Electronics business.

Griffon believes these alternatives will increase long-term value for Griffon shareholders, while creating enhanced growth opportunities for Telephonics.

Telephonics is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications.

Telephonics designs, develops, manufactures and provides logistical support and lifecycle sustainment services to defense, aerospace and commercial customers worldwide.

At September 30, 2022, $290,385 of revolver capacity was available under Griffon's Credit Agreement and Griffon had cash and equivalents of $120,184.

Other Business Highlights

In August 2020 Griffon completed the Public Offering of 8,700,000 shares of our common stock for total net proceeds of $178,165.

The Company used a portion of the net proceeds to repay outstanding borrowings under its Credit Agreement.

Company intends to use the remainder of the proceeds for general corporate purposes, including to expand its current business through acquisitions of, or investments in, other businesses or products.

The Company used the remainder of the proceeds for working capital and general corporate purposes.

During 2020, Griffon issued, at par, $1,000,000 of 5.75% Senior Notes due in 2028 (the “2028 Senior Notes”).

Proceeds from the 2028 Senior Notes were used to redeem the $1,000,000 of 5.25% Senior Notes due 2022.

Proceeds from the 2028 Senior Notes were used to redeem the $1,000,000 of 5.25% Senior Notes due in 2022.

In January 2020, Griffon amended its credit agreement to increase the total amount available for borrowing from $350,000 to $400,000, extend its maturity date from March 22, 2021 to March 22, 2025 and modify certain other provisions of the facility (the "Credit Agreement").

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operations, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES United Kingdom (U.K.) and Australia businesses, and a manufacturing facility in China.

The expanded focus of this initiative leverages the same three key development areas being executed within our U.S.

First, certain AMES global operations will be consolidated to optimize facilities footprint and talent.

Second, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

Third, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise.

Expanding the roll-out of the new business platform from our AMES U.S.

operations to include AMES’ global operations will extend the duration of the project by one year, with completion now expected by the end of calendar year 2023.

When fully implemented, these actions will result in annual cash savings of $30,000 to $35,000 and a reduction in inventory of $30,000 to $35,000, both based on fiscal 2020 operating levels.

The cost to implement this new business platform, over the duration of the project, will include one-time charges of approximately $65,000 and capital investments of approximately $65,000.

The one-time charges are comprised of $46,000 of cash charges, which includes $26,000 of personnel-related costs such as training, severance, and duplicate personnel costs as well as $20,000 of facility and lease exit costs.

The remaining $19,000 of charges are non-cash and are primarily related to asset write-downs.

On April 28, 2022, Griffon announced a reduced scope and an accelerated timeline for the initiative, which was completed in fiscal 2022.

These changes reflect the rapid progress made with the initiative, and reduced investment in facilities expansion and equipment given recent significant increases in construction and equipment costs.

Any remaining expenditures, after the end of fiscal 2022, including those related to the deployment of AMES' global information systems, will be included in the continuing operations of the business.

Future investments in equipment, particularly for automation, will be part of normal-course annual capital expenditures.

This initiative included three key development areas.

First, certain AMES U.S.

and global operations were consolidated to optimize facilities footprint and talent.

Second, strategic investments in automation and facilities expansion were made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

Third, multiple

independent information systems were unified into a single data and analytics platform, which will serve the whole AMES global enterprise.

We continue to expect that this initiative will result in annual cash savings of $25,000.

Realization of expected cash savings will begin in the first quarter of fiscal 2023.

The cost to implement this new business platform, over the duration of the project, included one-time charges of approximately $51,869 and capital investments of approximately $15,000, net of future proceeds from the sale of exited facilities.

In June 2018, Clopay acquired CornellCookson, a leading provider of rolling steel service doors, fire doors, and grilles, for an effective purchase price of approximately $170,000.

This transaction strengthened Clopay's strategic portfolio with a line of commercial rolling steel door products to complement Clopay's sectional door offerings in the commercial sector, and expands the Clopay network of professional dealers focused on the commercial market.

CornellCookson generated over $200,000 in revenue in its first full year of operations.

In March 2018, we announced the combination of the ClosetMaid operations with those of AMES.

ClosetMaid generated over $300,000 in revenue in the first twelve months after the acquisition, and the integration with AMES improved operational efficiencies by leveraging the complementary products, customers, warehousing and distribution, manufacturing, and sourcing capabilities of the two businesses.

This transaction strengthened Clopay's strategic portfolio with a line of commercial rolling steel door products to complement Clopay's sectional door offerings in the commercial sector, and expanded the Clopay network of professional dealers focused on the commercial market.

In March 2018, we announced the combination of the ClosetMaid operations with those of AMES, which improved operational efficiencies by leveraging the complementary products, customers, warehousing and distribution, manufacturing, and sourcing capabilities of the two businesses.

In February 2018, we closed on the sale of our Clopay Plastics Products ("Plastics") business to Berry Global, Inc.

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On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects for a purchase price of AUD $3,500 (approximately $2,700).

The purchase price is subject to additional contingent consideration of approximately AUD $1,000 (approximately $760) based on Quatro exceeding certain EBITDA performance targets in the first year.

Quatro is expected to contribute approximately $5,000 in annualized revenue in the first twelve months after the acquisition.

On December 18, 2020, Defense Electronics completed the sale of its Systems Engineering Group, Inc.

(“SEG”) business for $15,000.

SEG provides sophisticated, highly technical engineering and analytical support to the U.S.

Missile Defense Agency and various U.S.

military commands.

SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020.

Quatro contributed approximately $5,000 in revenue in the first twelve months after the acquisition.

On November 29, 2019, AMES acquired Vatre Group Limited ("Apta"), a leading U.K.

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market and access to leading garden centers, retailers, and grocers in the UK and Ireland.

In Australia, Griffon acquired Hills Home Living, the iconic brand of clotheslines and home products, from Hills Limited (ASX:HIL) in December 2016, and in September 2017 Griffon acquired Tuscan Path, an Australian provider of pots, planters, pavers, decorative stone, and garden décor products.

In Australia, Griffon acquired Hills Home Living, the iconic brand

of clotheslines and home products, from Hills Limited (ASX:HIL) in December 2016, and in September 2017 Griffon acquired Tuscan Path, an Australian provider of pots, planters, pavers, decorative stone, and garden décor products.

The Hills, Tuscan Path and December, 2020 Quatro acquisitions broadened AMES' outdoor living and lawn and garden business, strengthening AMES’ portfolio of brands and its market position in Australia and New Zealand.

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Reportable Segments:

Griffon now conducts its operations through two reportable segments:

• Consumer and Professional Products ("CPP") conducts its operations through AMES.

Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles.

CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid.

Griffon conducts its operations through two reportable segments:

• Consumer and Professional Products (“CPP”) is a leading North American manufacturer and a global provider of branded consumer and professional tools;

residential, industrial and commercial fans;

home storage and organization products;

and products that enhance indoor and outdoor lifestyles.

CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid.

• Home and Building Products ("HBP") conducts its operations through Clopay.

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Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes.

Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand.

Defense Electronics, classified as a discontinued operation, conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands.

Reportable Segments:

CONSUMER AND PROFESSIONAL PRODUCTS

The CPP segment consists of AMES.

Founded in Massachusetts in 1774, AMES has the distinction of being one of the oldest companies in continuous operation in the United States.

Consumer and Professional Products (“CPP”) is a leading North American manufacturer and a global provider of branded consumer and professional tools;

residential, industrial and commercial fans;

home storage and organization products;

and products that enhance indoor and outdoor lifestyles.

CPP sells products globally through a portfolio of leading brands including AMES, Hunter and ClosetMaid.

AMES, founded in Massachusetts in 1774, has the distinction of being one of the oldest companies in continuous operation in the United States.

Over its long life, AMES has grown organically and through the acquisition of other leading and historic tool businesses such as True Temper, Union Tools, and Garant.

Today, AMES is the leading manufacturer of long-handled tools and landscaping products for homeowners and professionals in North America, and also provides these products in key global markets including Canada, Australia, New Zealand, the U.K., and Ireland.

AMES is also the leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States through its ClosetMaid product line.

Since being acquired by Griffon in 2010, AMES has benefited from strategic acquisitions that have expanded its product portfolio and geographic presence.

The ClosetMaid, Southern Patio, and Harper Brush Works acquisitions added to AMES' product categories in North America to include storage and organization, decorative landscaping, and cleaning products.

Today, AMES is a leading manufacturer of long-handled tools and landscaping products for homeowners and professionals in North America, and also provides these products in key global markets including Canada, Australia, New Zealand, the U.K., and Ireland.

Under the ClosetMaid brand, CPP is the leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States.

Under the Hunter brand, since 1886, CPP is a leading provider of residential, industrial and commercial fans in the United States.

Since the acquisition of AMES by Griffon in 2010, CPP has benefited from strategic acquisitions that have expanded its product portfolio and geographic presence.

The Hunter Fan, ClosetMaid, Southern Patio, and Harper Brush Works acquisitions added to, or expanded CPP's product categories in North America to include residential, industrial and commercial fans, storage and organization, decorative landscaping, and cleaning products.

The acquisitions of Northcote, Cyclone, Hills, Nylex, Tuscan Path and Quatro in Australia established AMES as a leading supplier of tools and landscaping categories in the Australian market.

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and Ireland have become key markets for AMES products.

AMES has approximately 3,800 employees worldwide.

AMES' brands are among the most recognized across its primary product categories in North America, Australia and the United Kingdom.

CPP has approximately 3,200 employees worldwide.

CPP's brands are among the most recognized across its primary product categories in North America, Australia and the United Kingdom.

Its brand portfolio for long-handled tools, outdoor décor, and landscaping product includes AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Dynamic Design®™, Apta® and Quatro Design®.

Contractor-oriented tool brands include Razor-Back® Professional Tools and Jackson® Professional Tools.

AMES' home organization, general living storage, and garage storage products are sold primarily under the ClosetMaid® brand.

This strong portfolio of brands enables AMES to build and maintain long-standing relationships with leading retailers and distributors.

In addition, given the breadth of its brand portfolio and product category depth, AMES is able to offer specific, differentiated branding strategies for key retail customers.

These strategies focus on enhancement of brand value, with the goal of de-commoditizing AMES products through identity and functionality elements that makes each top brand unique, attractive and visually recognizable by the consumer.

In addition to the brands listed, AMES also sells private label branded products, further differentiating AMES in its customer offerings.

AMES manufactures and markets a broad portfolio of long-handled tools, landscaping products, and home organization products.

This portfolio contains many iconic brands and is anchored by five core product categories:

seasonal outdoor tools, project tools, outdoor décor and watering, home organization, and cleaning products.

As a result of brand portfolio recognition, outstanding product quality, industry leading service and strong customer relationships, AMES has earned market-leading positions in its five core product categories.

The following is a brief description of AMES' primary product lines:

CPP's home organization, general living storage, and garage storage products are sold primarily under the ClosetMaid® brand.

CPP's residential, industrial and commercial fan products are sold under the Hunter Fan and Casablanca brands.

This strong portfolio of brands enables CPP to build and maintain long-standing relationships with leading retailers and distributors.

In addition, given the breadth of its brand portfolio and product category depth, CPP is able to offer specific, differentiated branding strategies for key retail customers.

These strategies focus on enhancement of brand value, with the goal of de-commoditizing CPP products through identity and functionality elements that makes each top brand unique, attractive and visually recognizable by the consumer.

CPP manufactures and markets a broad portfolio of long-handled tools, landscaping products, home organization products and residential, industrial and commercial fans.

This portfolio contains many iconic brands and is anchored by six core product categories:

seasonal outdoor tools, project tools, outdoor décor and watering, home organization, fans and cleaning products.

As a result of brand portfolio recognition, outstanding product quality, industry leading service and strong customer relationships, CPP has earned market-leading positions in its six core product categories.

The following is a brief description of CPP's primary product lines:

• Seasonal Outdoor Tools

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Axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars and repair handles make up the striking tools product line.

These products are marketed under the True Temper®, Cyclone®, Garant®, Jackson® Professional Tools and Razor-Back® Professional Tools brand names.

These products are marketed under the True Temper®, AMES®, Cyclone®, Garant®, Jackson® Professional Tools and Razor-Back® Professional Tools brand names.

• Hand Tools:

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• Garden Hose and Storage:

AMES offers a wide range of manufactured and sourced garden hoses and hose reels under the AMES®, NeverLeak®, Nylex®, and Hills® brand names.

AMES offers a wide range of manufactured and sourced garden hoses and hose reels under the AMES®, NeverLeak® and Nylex® brand names.

• Home Organization :

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Selected wood product brands include MasterSuite®, Suite Symphony®™, ExpressShelf®, Style+®, and SpaceCreations®.

CPP designs and sells residential, industrial and commercial fans under the Hunter Fan and Casablanca brand names.

• Cleaning Products :

AMES offers a complete line of cleaning products for professional, home, and industrial use, including brooms, brushes, squeegees and other cleaning products, primarily under the Harper® brand.

AMES sells products throughout North America, Australia, New Zealand and Europe through (1) home centers, such as The Home Depot, Inc.

CPP offers a complete line of cleaning products for professional, home, and industrial use, including brooms, brushes, squeegees, and other cleaning products, primarily under the Harper® brand.

CPP sells products throughout North America, Australia, New Zealand, the U.K.

and Ireland through (1) home centers, such as The Home Depot, Inc.

(“Home Depot”), Lowe’s Companies Inc.

(“Lowe’s”), Rona Inc., Bunnings Warehouse ("Bunnings") and Woodies (with the average length of the relationship with these customers being approximately 30 years);

(2) mass market, specialty, and hardware retailers including Wal-Mart Stores Inc.

(2) mass market, specialty, and hardware retailers including Tractor Supply Corporation (“Tractor Supply”), Wal-Mart Stores Inc.

("Walmart"), Target Corporation ("Target"), Canadian Tire Corporation, Limited ("Canadian Tire"), Costco Wholesale Corporation ("Costco"), Ace, Do-It-Best and True Value Company;

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Grainger, Inc.

and ORS Nasco, and (4) homebuilders, such as D.R.

and ORS Nasco;

(4) homebuilders, such as D.R.

Horton, KB Home, Lennar and NVR, Inc.;

Home Depot, Lowe's and Bunnings are significant customers of AMES.

The loss of any of these customers would have a material adverse effect on the AMES business and on Griffon.

and (5) E-commerce platforms, such as Amazon Inc.

(“Amazon”), Wayfair Inc., (“Wayfair), Hayneedle Inc., “(Hayneedle”), Overstock Inc.

(“Overstock”) , and Spreetail LLC.

(“Spreetail”).

Home Depot, Lowe's, Menards and Bunnings are significant customers of CPP.

The loss of any of these customers would have a material adverse effect on the CPP business and on Griffon.

Product Development

AMES product development efforts focus on both new products and product line extensions.

AMES continually improves existing products as well as develops new products to satisfy consumer needs, expand revenue opportunities, maintain or extend competitive advantages, increase market share and reduce production costs.

CPP product development efforts focus on both new products and product line extensions.

CPP continually improves existing products as well as develops new products to satisfy consumer needs, expand revenue opportunities, maintain or extend competitive advantages, increase market opportunity and reduce production costs.

Products are developed through in-house industrial design and engineering staffs to introduce new products and product line extensions that are timely and cost effective.

Sales and Marketing

AMES' sales organization is structured by distribution channel in the U.S., and by country internationally.

CPP's sales organization is structured by product line and distribution channel in the U.S., and by country internationally.

In the U.S., a dedicated team of sales professionals is provided for each of the large retail customers.

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In addition, sales professionals are assigned to domestic, wholesale and industrial distribution channels.

Sales teams located in Canada, Australia, the United Kingdom and Ireland handle sales in each of their respective regions.

Sales teams located in Canada, Australia, the United Kingdom, Mexico and Ireland handle sales in each of their respective regions.

In Australia, a dedicated team of sales professionals is provided for the largest retail customer.

AMES also is making investments in automation, facilities expansion and fulfillment operations to support e-commerce growth.

CPP has made significant investments in automation, facilities expansion and fulfillment operations to support e-commerce growth.

Raw Materials and Suppliers

AMES' primary raw material inputs include resin (primarily polypropylene and high density polyethylene), wood (particleboard and hardwoods including ash, hickory and poplar logs) and steel (hot rolled, cold rolled, and wire rod).

CPP's primary raw material inputs include resin (primarily polypropylene and high density polyethylene), wood (particleboard and hardwoods including ash, hickory and poplar logs) and steel (hot rolled, cold rolled, and wire rod).

All raw materials are generally available from a number of sources.

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Most final assembly is completed internally in order to ensure consistent quality.

AMES also sources some finished goods.

CPP also sources certain finished goods, primarily in storage and organization, outdoor décor, residential, industrial and commercial fans, and tools for non-North American locations.

The long-handled tools and landscaping product industry is highly competitive and fragmented.

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The home storage and organizational solutions industry is also highly fragmented.

AMES, primarily under the ClosetMaid brands, sells through retail, direct to consumer (e-commerce category) and direct to installer (building) channels and competes with a significant number of companies across each of these unique channels.

CPP, primarily under the ClosetMaid brands, sells through retail, direct to consumer (e-commerce category) and direct to installer (building) channels and competes with a significant number of companies across each of these unique channels.

Principal competition for retail wire products is from Newell Brands, Inc.

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sells competing wood solutions under the brand California Closets®, but does not sell through the retail or direct to consumer channels.

We believe that AMES' market share in the U.S.

is approximately double that of its largest competitors in the home storage and organizational solutions product category.

AMES differentiates itself and provides the best value to customers through its successful history of innovation, dependable supply chain and high on-time delivery rates, quality, product performance, and highly recognized product brands.

AMES' size, depth and breadth of product offering, category knowledge, research and development (“R&D”) investment, service and its ability to react to sudden changes in demand from seasonal weather patterns, especially during harsh winter months, are competitive advantages.

The residential, industrial, and commercial fan industry is fragmented.

CPP, under the highly recognized Hunter brand, sells through direct to consumer (e-commerce category), retail, and direct to installer (industrial and commercial) channels.

CPP's principal competitors in the consumer ceiling fan market are retailer house brands such as Hampton Bay in The Home Depot and Harbor Breeze in Lowe’s, followed by Minka Air.

In the industrial and commercial fan space, principal competitors are Big Ass Fans, Rite-Hite, Macro Air, and Minka Air.

CPP differentiates itself and provides the best value to customers through its successful history of innovation, dependable supply chain and high on-time delivery rates, quality, product performance, and highly recognized product brands.

CPP's size, depth and breadth of product offering, category knowledge, research and development (“R&D”) investment, service and its ability to react to sudden changes in demand from seasonal weather patterns, especially during harsh winter months, are competitive advantages.

Offshore manufacturers lack sufficient product innovation, capacity, proximity to market and distribution capabilities to service large retailers or to efficiently and effectively compete in highly seasonal, weather related product categories.

Manufacturing and Distribution

AMES has a combination of internal and external, and domestic and foreign, manufacturing sources from which it sources products for sale in the markets it serves.

Principal manufacturing facilities include 644,000 square feet of manufacturing operations in Harrisburg and Camp Hill, Pennsylvania, a 676,000 square foot facility in Ocala, Florida, and a 353,000 square foot manufacturing center in St.

CPP has a combination of internal and external, and domestic and foreign, manufacturing sources from which it sources products for sale in the markets it serves.

Principal North American manufacturing facilities include 644,000 square feet of manufacturing operations in Harrisburg and Camp Hill, Pennsylvania, a 676,000 square foot facility in Ocala, Florida, and a 353,000 square foot manufacturing center in St.

Francois, Quebec, Canada.

AMES operates smaller manufacturing facilities, including wood mills, at several other locations in the United States, and internationally in Reynosa, Mexico;

Jiangmen, China;

CPP operates smaller manufacturing facilities, including wood mills, at several other locations in the United States, and internationally in Jiangmen, China;

and Grafton, New South Wales and Wonthaggi, Victoria, both in Australia.

AMES has two principal distribution facilities in the United States, a 1.4 million square foot facility in Carlisle, Pennsylvania and a 774,000 square foot facility in Reno, Nevada.

Finished goods are transported to these facilities from AMES' manufacturing sites by both an internal fleet, as well as over the road trucking and rail.

CPP has three principal distribution facilities in the United States, a 1.4 million square foot facility in Carlisle, Pennsylvania a 997,000 square foot facility in Reno, Nevada and a 600,000 square foot facility in Byhalia, MS.

Finished goods are transported to these facilities from both North American manufacturing sites and from North American ports by both an internal fleet, as well as over the road trucking and rail.

Additionally, light assembly is performed at the Carlisle and Reno locations.

Smaller distribution centers are also strategically located in the U.S.

in Ocala, Florida and Pharr, Texas, and internationally in Canada, Australia, the United Kingdom and Ireland.

in Ocala, Florida, and internationally in Canada, Australia, the United Kingdom and Ireland.

HOME AND BUILDING PRODUCTS

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Residential and commercial sectional products are sold under market-leading brands including Clopay®, America’s Favorite Garage Doors®, Holmes Garage Door Company® and IDEAL Door®.

Clopay commercial rolling steel door brands include Cornell®, Cookson®, CornellCookson® and Clopay®.

Clopay commercial rolling steel door brands include Cornell®, Cookson® and Clopay®.

Products and Service

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Clopay's principal manufacturing facilities include 1,480,000 square feet in Troy and Russia, Ohio, 279,000 square feet in Mountain Top, Pennsylvania and 163,000 square feet in Goodyear, Arizona.

On January 31, 2019, Clopay announced a $14,000 investment in facilities infrastructure and equipment at its rolling steel manufacturing location in Mountain Top, Pennsylvania.

This project included a 95,000 square foot expansion to the already existing 184,000 square foot facility, along with the addition of state-of-the-art manufacturing equipment.

Through this expansion, the Mountain Top location improved its manufacturing efficiency and shipping operations, as well as increased manufacturing capacity to support full-rate production of new and core products.

The project was completed at the end of calendar 2019.

Clopay distributes its products through a wide range of distribution channels, including a national network of 52 distribution centers with a total of approximately 1,200,000 square feet.

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DEFENSE ELECTRONICS

On September 27, 2021, Griffon announced it is exploring strategic alternatives for its Defense Electronics segment, which consists of Telephonics Corporation ("Telephonics").

On September 27, 2021, Griffon announced it was exploring strategic alternatives for its Defense Electronics segment, which consisted of Telephonics Corporation ("Telephonics"), and on June 27, 2022, Griffon completed the sale of Telephonics to TTM for $330,000, excluding certain customary post-closing adjustments, primarily related to working capital.

Griffon classified the results of operations of the Telephonics business as a discontinued operation in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operation as held for sale in the consolidated balance sheets.

Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations unless noted otherwise.

Telephonics, founded in 1933, is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications.

Telephonics designs, develops, manufactures and provides logistical support and lifecycle sustainment services to defense, aerospace and commercial customers worldwide.

In 2021, approximately 69% of the DE sales were to the U.S.

Government and agencies thereof, as a prime or subcontractor, 26% to international customers and 5% to U.S.

commercial customers.

Telephonics is headquartered in Farmingdale, New York and currently has approximately 700 employees.

Internationally, demand is growing due to major system capability upgrades in existing systems and re-capitalization of aging assets.

is the largest exporter of defense equipment in the world, and is expected to remain so for the foreseeable future, with significant increases in defense budgets expected in countries that have historically imported defense products from the U.S.

such as Saudi Arabia, UAE, Taiwan, Australia, India, South Korea and Japan, among others.

Domestic and international defense market trends bode well for business opportunities for Telephonics products supporting Imaging and Surveillance Radar Systems, Communications, Surveillance and Border Surveillance.

On December 18, 2020, Defense Electronics completed the sale of its SEG business for $15,000.

SEG provides sophisticated, highly technical engineering and analytical support to the Missile Defense Agency and various U.S.

military commands.

SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020.

DE recorded a pre-tax gain of $5,291 ($5,443, including a net tax benefit of $152) related to the divestiture of SEG.

Telephonics is organized into four primary business lines:

Radar Systems, Surveillance, Communications and Telephonics Large Scale Integration (TLSI).

Telephonics provides a wide range of high-performing, lightweight and cost-effective maritime surveillance and weather avoidance radar systems for fixed- and rotary-wing aircraft, Unmanned Aerial Vehicles (UAVs) and shipboard platforms to the U.S.

Government and numerous international defense agencies.

Telephonics is also the sole provider of the US Navy’s AN/APS-153 multi-mode radar and the communications suite within the MH-60R/S multi-mission helicopters.

Our maritime surveillance radars offer advanced features such as Ground Moving Target Indicator (GMTI), Synthetic Aperture Radar (SAR), Inverse Synthetic Aperture Radar (ISAR), Automatic Identification System (AIS) and weather avoidance.

Telephonics is developing the next generation multi-mode maritime and over-land surveillance Active Electronically Scanned Array (AESA) radar known as MOSAIC.

• Surveillance:

Telephonics is a global leader in Identification Friend or Foe (IFF), Monopulse Secondary Surveillance Radars (MSSR) and Air Traffic Control (ATC) systems enabling military and civilian air traffic controllers to effectively identify aircraft and vehicles as friendly.

Telephonics provides both equipment and supporting services required to safely and reliably control flight operations.

These systems are used by the U.S.

Air Force, U.S.

Marines, Federal Aviation Administration ("FAA"), NATO and numerous international defense agencies including those of Japan and South Korea.

They have been fielded globally in a wide range of ground, air and sea-based applications.

• Communications:

Telephonics' advanced wired and wireless communication systems provide the digital backbone for defense and civil platforms worldwide, including fixed- and rotary-wing aircraft, lighter-than-air aircraft and ground control shelters.

These systems are designed to meet stringent customer requirements to support adaptability to special missions and communications protocol requirements.

Telephonics' vehicle-based intercommunications systems deliver traditional intercom system capabilities while incorporating software-defined features, including an open architecture for integration into vehicle C4 (command, control, communications and computing) systems, networked communications gateways and combat vehicles.

Commercial audio products and headsets are utilized worldwide in a wide range of military and civilian applications, including audiometric testing and onboard flight entertainment.

Telephonics communications systems are fielded within the U.S.

Air Force, U.S.

Marines and numerous international defense agencies.

These systems are also sold to aerospace manufacturers, commercial airlines and audiometric original equipment manufacturers.

• Telephonics Large Scale Integration (TLSI):

TLSI has designed nearly 400 mixed-signal custom Application Specific Integrated Circuits (ASICs) for customers in the automotive, industrial, defense/avionics and smart energy markets.

TLSI works with its customers' technical teams, taking complete responsibility for the ASIC development process, from the initial ASIC specification definition through qualification and volume production, to meet the most stringent customer program requirements.

Over 10 million ASICs are shipped every year.

To meet the unique challenges of operating in an increasingly complex industry that is faced with continued economic and budgetary pressure on U.S.

defense procurement, Telephonics has adapted its core surveillance and communications products, typically used by the U.S.

government and its agencies, to meet the needs of international customers in both defense and commercial markets.

Telephonics' two largest product lines include maritime surveillance radar and aircraft intercommunication management systems and as Telephonics continues to concentrate on adjacent markets to grow these

product lines both domestically and internationally, the company remains focused on delivering high-quality products and services that protect military personnel and civilian interests world-wide.

Telephonics’ leading-edge products and services are well-positioned to address the needs of a fully integrated and modernized battlefield with an emphasis on providing complete situational awareness to the warfighter whether on the ground, in the air or at sea, providing timely, secure and accurate intelligence.

Telephonics anticipates that the need for secure, integrated surveillance and communications capabilities will continue to increase as the U.S.

and foreign militaries expand their role in fighting terrorism both at home and abroad.

Telephonics has also invested in design and development of technologies focused on advanced intelligence and surveillance sensors with applications in both manned and unmanned systems, as well as border and perimeter security markets.

Telephonics is a partner in Mahindra Telephonics Integrated Systems, a Joint Venture (JV) with Mahindra Defense Systems in India.

The business is focused on providing the Indian defense and civil sectors with surveillance, communications and IFF systems.

The JV also intends to provide air traffic management (ATM), border and perimeter security and other surveillance technologies to meet emerging demands.

Programs and Products

Based on long-established relationships supported by existing contractual arrangements, Telephonics is a first-tier supplier to prime contractors in the defense industry such as Lockheed Martin Corporation ("Lockheed Martin", which includes Sikorsky Aircraft), The Boeing Company ("Boeing"), Northrop Grumman Corporation ("Northrop Grumman"), Airbus Military, Airbus Helicopters, Leonardo (AgustaWestland) Helicopters, and SAAB (with the average length of the relationship with these customers being greater than 20 years), and is a prime contractor to the U.S.

Department of Defense and FAA.

The significance of each of these customers to Telephonics’ revenue fluctuates on an annual basis, based on the timing and funding of the Original Equipment Manufacturers (“OEM”) contract award, and the technological scope of the work required.

Key products include maritime radars, identification friend or foe systems, mobile surveillance and communication systems.

The significant contraction and consolidation in the U.S.

and international defense industry provides opportunities for established first-tier suppliers to capitalize on existing relationships with major prime contractors and to play a larger role in defense systems development and procurement for the foreseeable future.

Telephonics successfully leveraged its core Surveillance technologies to develop a solution, now fielded by the FAA as a part of the Common Terminal Digitizer (CTD) program, at numerous air surveillance radar sites across the United States.

Telephonics expects to continue to leverage its technology to improve the value proposition offered to future FAA radar infrastructure upgrade programs.

Telephonics continues to direct resources towards border surveillance and critical infrastructure security initiatives.

These opportunities represent strategic advances for Telephonics by enabling it to expand its core technical expertise into the nascent and growing border and perimeter security markets, both in the U.S.

With many of these programs, system specifications and operational and test requirements are challenging, exacerbated by demanding delivery schedules.

Telephonics believes that the technological capabilities these systems encompass will also be able to serve and protect the most complex borders.

The funded contract backlog for Telephonics was approximately $352,200 at September 30, 2021 with 62% expected to be fulfilled in the next 12 months;

backlog was $370,000 at September 30, 2020 (excludes approximately $10,000 of SEG related backlog).

Backlog is defined as unfilled firm orders for products and services for which funding has been both authorized and appropriated by the customer or U.S.

Congress, in the case of U.S.

Government agencies.

Backlog generally increases with bookings and converts into revenue as we incur costs related to contractual commitments or the shipment of product.

The decrease in backlog was primarily attributed to the timing of various international and domestic contract awards with radar, surveillance and communications that were not received by the end of the reporting period.

Timing of Domestic awards were impacted by COVID driving significant remote work and inefficiency.

Given the nature of our business and a larger dependency on international customers, our bookings, and therefore our backlog, is impacted by the longer maturation cycles resulting in delays in the timing and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets;

political uncertainty;

the timing of customer negotiations;

and the timing of governmental approvals.

Government, through prime contractors like Lockheed Martin, Northrop Grumman, and Boeing, is a significant customer of Telephonics.

The loss of the U.S.

Government or any of its prime contractors as a customer could have a material adverse effect on Telephonics’ business.

Notwithstanding the significance of Lockheed Martin, Northrop Grumman and Boeing, Telephonics sells to a diverse group of other domestic and international defense industry contractors, as well as others who use Telephonics products for commercial use.

Telephonics participates in a range of long-term defense and non-military government programs, both in the U.S.

and internationally.

Telephonics has developed a base of installed products that generate significant recurring revenue from product enhancements and retrofits, as well as providing spare parts and customer support.

Due to the inherent complexity of these electronic systems, Telephonics believes that its incumbent status on major platforms provides a competitive advantage in the selection process for platform upgrades and enhancements.

Furthermore, Telephonics believes that its ability to leverage and apply its advanced technology to new platforms provides a competitive advantage when bidding for new business.

Research and Development (R&D)

In order to continue to offer affordable and technologically advanced solutions that provide relevant and required features, Telephonics works closely with prime customers to ensure that there is a future market for its products by investing R&D funds in desired enhancements.

Telephonics continually updates its core technologies through internally funded R&D while coordinating with customers at the earliest stages of new program development in an effort to provide solutions well in advance of its competitors.

Internally funded R&D costs include basic and applied research initiatives, development activities, and other conceptual formulation studies.

Telephonics is a technological leader in its core markets and pursues new growth opportunities by leveraging its systems design and engineering capabilities, and incumbent position, on key platforms.

In addition to products for defense programs, Telephonics' technology is also used in commercial applications such as airborne weather, search and rescue radar, and air traffic management systems.

Telephonics’ reputation for innovative product design and engineering capabilities, especially in the areas of voice and data communications, radio frequency design, digital signal processing, networking systems, inverse synthetic aperture radar and analog, and digital and mixed-signal integrated circuits, will continue to enhance its ability to secure, retain and expand its participation in defense programs and commercial opportunities.

Telephonics often designs its products to exceed customers’ minimum specifications, providing its customers with greater performance, flexibility, and value.

Telephonics believes that early participation and communication with its customers in the requirements definition stages of new program development increases the likelihood that its products will be selected and integrated as part of a total system solution.

Telephonics is currently investing in an Active Electronically Scanned Array (AESA) based radar solution to address emerging requirements in the maritime and overland radar markets.

Continued investments in the Surveillance product portfolio are expected to result in market penetration opportunities in the ground tactical markets with small form factor passive and active IFF solutions.

Sales and Marketing

Telephonics has technical business development personnel who act as the focal point for its marketing activities and sales representatives who introduce its products and systems to customers worldwide.

Telephonics competes with major manufacturers of electronic information and communication systems, as well as several smaller manufacturers of similar products.

Telephonics endeavors to design high quality and reliable products with greater performance and flexibility than its competitors while competing on the basis of technology, innovative solutions, and price.

Manufacturing Facilities

Telephonics’ manufacturing facilities are located in the U.S., with significant facilities located in New York and North Carolina.

Intellectual Property

In the government and defense business, formal intellectual property rights are of limited value.

Therefore, the Telephonics business tends to hold most of its important intellectual property as trade secrets, which it protects through the use of contract terms and carefully restricting access to its technology.

Telephonics, which sells directly and indirectly to the U.S.

Government, is subject to certain regulations, laws and standards set by the U.S.

Additionally, Telephonics is subject to routine audits and investigations by U.S.

Government Agencies such as the Defense Contract Audit Agency, the Defense Counterintelligence and Security Agency, with respect to its classified contracts, and other Inspectors General.

These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards, including those relating to facility and personnel security clearances.

These agencies also review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s management, purchasing, property, estimating, compensation, and accounting and information systems.

Telephonics revenue is generally driven by the delivery requirements of its customers;

accordingly, Telephonics will often have increased revenue in the latter half of the year due to the U.S.

government's annual budget cycle.

Griffon Corporation

As of September 30, 2021, Griffon and its subsidiaries employ approximately 6,700 employees, excluding approximately 700 employees related to Telephonics discontinued operation, located primarily throughout the U.S., Canada, the United Kingdom, Australia, Mexico and China.

As of September 30, 2022, Griffon and its subsidiaries employ approximately 6,200 employees located primarily throughout the U.S., Canada, the United Kingdom, Australia, and China.

Generally, the total number of employees of Griffon and its subsidiaries does not significantly fluctuate throughout the year.

However, acquisition activity or the opening of new branches or lines of business may increase the number of employees or fluctuations in the level of Griffon's business activity, which could in turn require staffing level adjustments in response to actual or anticipated customer demand.

Approximately 300 of these employees, excluding approximately 60 employees employed by Telephonics, are covered by collective bargaining agreements in the U.S., with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (an affiliate of the American Federation of Labor and Congress of Industrial Organizations), and the United Food & Commercial Workers International Union.

However, acquisition activity or the opening of new branches or lines of business, or other changes in the level of Griffon's business activity (for instance, based on actual or anticipated customer demand or other factors), could require staffing level adjustments.

Approximately 70 of these employees are covered by collective bargaining agreements in the U.S., with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (an affiliate of the American Federation of Labor and Congress of Industrial Organizations), and the United Food & Commercial Workers International Union.

Additionally, approximately 200 employees in Canada are represented by the Trade Union Advisory Committee.

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All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.

The COVID-19 pandemic presented unprecedented challenges in many parts of our businesses and operations, including with respect to our most valuable asset - our people.

In response, we developed and implemented new procedures and protocols to minimize the risk to the health and safety of our employees while allowing us to continue to operate our facilities and provide high quality products to our customers on a timely basis.

Employees that could work from home were strongly encouraged (and in some cases, required) to do so in order to minimize the number of employees in our facilities.

For onsite employees, we implemented protocols for social distancing, sanitation and mask-wearing.

We developed systems and purchased new equipment to facilitate the efficient sanitation and disinfection of all work areas.

We reconfigured work processes to allow additional spacing between associates whenever possible;

eliminated seating in common areas of many buildings to allow for appropriate distancing;

staggered shifts and start, stop and break times;

and at many facilities we began monitoring

temperatures of all employees entering the facility.

We also restricted visitors and pre-screened all contractors who required access to our facilities.

We implemented appreciation award programs for many of our U.S.

employees who continued to work onsite during the pandemic.

We have continuously reviewed, upgraded and improved these procedures and policies as circumstances have required.

Throughout the pandemic nearly all our facilities around the globe have remained open and we have made every effort to meet our customers’ demands for our products, while at the same time making the necessary investments to ensure that we prioritize the health, safety and welfare of our employees.

Griffon’s operations are subject to various environmental, health, and employee safety laws and regulations.

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The loss of all or a portion of volume from any one of these customers could have a material adverse impact on Griffon’s financial results, liquidity and operations.

Griffon’s revenue and income are generally lowest in our first and fourth quarters ending December 31, and September 30, respectively, and highest in our second and third quarters ending March 31, and June 30, respectively, primarily due to the seasonality within the AMES and Clopay businesses.

In 2021, 53% of AMES' sales occurred during the second and third quarters compared to 53% and 56% in 2020 and 2019, respectively.

In 2021 and 2020, as a result of the COVID-19 pandemic, sales orders shifted somewhat into the third and fourth quarters resulting in revenue increasing in these two quarters to 55% in each of 2021 and 2020 sales.

Clopay’s business is driven by renovation and construction during warm weather, which is generally at reduced levels during the winter months, generally in our second quarter.

Griffon's revenue and earnings are generally lowest in our first and fourth quarters ending December 31, and September 30, respectively, and highest in the second and third quarters ending March 31, and June 30, respectively, primarily due to the seasonality within the CPP and HBP businesses.

In 2022, with the addition of Hunter Fan, 58% (55%, excluding Hunter Fan sales) of CPP's' sales occurred during the second and third quarters compared to 53% in both 2021 and 2020.

HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter.

Demand for lawn and garden products is influenced by weather, particularly weekend weather during peak gardening season.

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Griffon’s non-U.S.

businesses are primarily in Canada, Australia, the U.K., Mexico and China.

businesses are primarily in Canada, Australia, the U.K., Ireland and China.

Research and Development

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All intellectual property information presented in this section is as of September 30, 2022.

Trademarks are of significant importance to Griffon’s AMES and Clopay businesses.

With 50 years of experience and innovation in the garage door industry, and over 100 years of experience in the rolling steel door industry, Clopay has a significant level of goodwill in its strong family of brands, including:

Trademarks are of significant importance to Griffon’s HBP and CPP businesses.

With 50 years of experience and innovation in the garage door industry, and over 100 years of experience in the rolling steel door industry, HBP has a significant level of goodwill in its strong family of brands, including:

Clopay®, America’s Favorite Doors®;

Holmes Garage Door Company®;

and the Cornell®, Cookson®, and CornellCookson® commercial door brands.

Principal global and regional trademarks used by AMES for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Apta®, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.

Storage and home organization brands within AMES include ClosetMaid®, MasterSuite®, Suite Symphony®, Cubeicals®, ExpressShelf®, SpaceCreations®, Maximum Load®, SuperSlide® and ShelfTrack®.

The AMES and Clopay businesses have approximately 1,305 registered trademarks and approximately 251 pending trademark applications around the world.

and the Cornell® and Cookson® commercial door brands.

Principal global and regional trademarks used by CPP for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Apta®, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.

Storage and home organization brands within CPP include ClosetMaid®, MasterSuite®, Suite Symphony®, Cubeicals®, ExpressShelf®, SpaceCreations®, Maximum Load®, SuperSlide® and ShelfTrack®.

CPP’s Hunter Fan Company has over 135 years of experience in the ceiling fan industry with well-recognized brands including Hunter®, Casablanca®, Hunter Industrial®, and Jan Fan® .

The HBP and CPP businesses have approximately 1,671 registered trademarks and approximately 174 pending trademark applications around the world.

Griffon’s rights in these trademarks endure for as long as they are used and registered.

Patents are also important to the AMES and Clopay businesses.

Clopay holds approximately 40 issued patents and 29 pending patent applications in the U.S., as well as approximately 16 and 29 corresponding foreign patents and patent applications, primarily related to garage door system components and operation.

AMES protects its designs and product innovation through the use of patents, and currently has approximately 304 issued patents and approximately 54 pending patent applications in the U.S., as well as approximately 281 and 60 corresponding foreign patents and patent applications, respectively.

Patents are also important to the HBP and CPP businesses.

HBP holds approximately 45 issued patents and 23 pending patent applications in the U.S., as well as approximately 19 and 46 corresponding foreign patents and patent applications, primarily related to garage door system components and operation.

CPP protects its designs and product innovation through the use of patents, and currently has approximately 723 issued patents and approximately 211 pending patent applications in the U.S., as well as approximately 310 and 107 corresponding foreign patents and patent applications, respectively.

Design patents are generally valid for fourteen years, and utility patents are generally valid for twenty years, from the date of filing.

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Environmental, Social and Governance

Griffon and its operating companies have taken into account environmental, social and governance (ESG) considerations in the management of our businesses for years.

This year, Griffon formalized its ESG commitment by subscribing to the United Nations Global Compact (UNGC) and reinforcing its commitment to protecting the environment and our workers, and to ethical and transparent behavior in our business relationships.

The Griffon ESG policy can be found on the Griffon website at www.griffon.com.

The ESG section of our website also provides details on some of the Company’s efforts and commitments in the environmental, social and governance areas as well as a statement from Ronald J.

Kramer, our Chief Executive Officer, reinforcing management’s strong support for our ESG efforts.

As part of its commitment to the Sustainable Development Goals contained in the UNGC, Griffon will periodically communicate the status of its ESG goals, starting with the publication of its inaugural FY21 ESG Report.

The fiscal 2021 ESG Report will discuss community involvement, charitable giving, employee safety, employee education and welfare, energy consumption, water consumption, waste generated, recycled raw materials, and packaging initiatives.

During fiscal 2021, Griffon began gathering ESG metrics in each of these areas.

The fiscal 2021 ESG Report will be benchmarked against the UNGC Sustainable Development Goals and the Sustainability Accounting Standards Board Standards applicable to Griffon’s businesses.

We are preparing to set ESG goals based on the metrics gathered in fiscal 2021 and will begin announcing these goals in fiscal 2022.

Griffon and its operating companies have always taken into account environmental, social and governance (ESG) considerations in the management of our businesses.

Griffon is a subscriber to the United Nations Global Compact (UNGC) and published its inaugural annual ESG report, in relation to fiscal 2021, benchmarked to both UNGC Sustainable Development Goals and to the Sustainability Accounting Standards Board criteria.

The Griffon ESG policy and fiscal 2021 ESG Report can be found on the Griffon website at www.griffon.com.

The fiscal 2021 ESG Report discusses community involvement, charitable giving, employee safety, employee education and welfare, energy consumption, water consumption, waste generated, recycled raw materials, and packaging initiatives.

We are preparing to set ESG goals in fiscal 2023 and fiscal 2024 based on the metrics gathered in fiscal 2021, which process continued through 2022, and will continue through fiscal 2023.

Griffon has assessed the environmental risk from its operations and has focused its efforts to date on areas with the potential to have the greatest environmental impact.

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For example, bags used for AMES’ Kelkay aggregate products in the UK are made from plant-based materials, and not from petroleum.

Seventy percent of the steel used in Clopay garage doors is recycled steel.

Seventy percent of the steel used in HBP's garage doors is recycled steel.

AMES is a member of the Appalachian Hardwood Manufacturers Association, which provides sustainable hardwoods for AMES tools, and is committed to purchasing hardwoods through the Sustainable Forestry Initiative.

Griffon has made a focused effort to reduce carbon emissions by reducing electricity and natural gas usage at its operating facilities.

Our Clopay business also helps its customers reduce their own carbon footprints by providing garage doors that meet LEED (Leadership in Energy and Environmental Design) building construction standards.

Griffon continues its efforts to reduce carbon emissions by reducing electricity and natural gas usage at its operating facilities.

Our Clopay business helps its customers reduce their own carbon footprints by providing garage doors that meet LEED (Leadership in Energy and Environmental Design) building construction standards.

While Griffon’s facilities are not large consumers of water, we routinely examine options to reduce water usage or reuse water at our facilities.

AMES used recycled AMES and ClosetMaid tools and scrap materials in the construction of the new AMES and ClosetMaid headquarters facility in the Orlando, Florida area.

AMES used recycled AMES and ClosetMaid tools and scrap materials in the construction of the new AMES headquarters facility in the Orlando, Florida area.

Over the years, Griffon operating companies have reduced the use of solvents and other chemicals and now rarely generate hazardous waste of any kind.

Our operating companies are involved in the local communities in which they operate, where we have chosen to expand United States based production facilities rather than outsource production.

Our operating companies are involved in the local communities in which they operate.

We are involved in more than 100 charitable and community organizations, including well known national concerns such as Habitat for Humanity, Boys and Girls Clubs, the Home Depot Foundation (Diamond Sponsor) and the American Cancer Society, as well as local groups such as garden clubs.

For example, employees at our Telephonics subsidiary established and maintained a produce garden, donating all of the food grown to local food pantries.

Employees at our Clopay subsidiary built a new home for Habitat for Humanity, and our AMES subsidiary contributed tools and products to that effort.

For example, employees at our Clopay subsidiary built a new home for Habitat for Humanity, and AMES contributed tools and products to that effort.

Our communities know that they can count on us in a crisis.

The COVID-19 pandemic presented unprecedented challenges in many parts of our businesses and operations, including with respect to our most valuable asset - our people.

Employees that could work from home were strongly encouraged (and in some cases, required) to do so in order to minimize the number of employees in our facilities.

For onsite employees, we implemented protocols for social distancing, sanitation and mask-wearing.

We developed systems and purchased new equipment to facilitate the efficient sanitation and disinfection of all work areas.

We reconfigured work processes to allow additional spacing between associates whenever possible;

eliminated seating in common areas of many buildings to allow for appropriate distancing;

staggered shifts and start, stop and break times;

and at many facilities we began monitoring temperatures of all employees entering the facility.

We also restricted visitors and pre-screened all contractors who required access to our facilities.

We implemented appreciation award programs for many of our U.S.

employees who continued to work onsite during the pandemic.

We have continuously reviewed, upgraded and improved these procedures and policies as circumstances have required.

Over the last three years, we have invested millions of dollars in capital improvements relating to energy consumption and to employee safety and health.

Over the last five years, we have invested millions of dollars in capital improvements relating to energy consumption and to employee safety and health.

These improvements include lighting energy efficiency projects saving in excess of 1.5 million kilowatt-hours, major upgrades to our loading and unloading operations (which had been the source of a significant portion of our worker injuries), ergonomic improvements, machine guarding and elimination of certain high-risk repetitive jobs through use of robotics.

Griffon has also invested significant time and capital reducing ergonomic injuries through better work positioning and lifting improvements.

We have seen significant reductions in both the number and severity of employee injuries in recent years.

Griffon has also invested over one million dollars in improvements to employee welfare facilities, such as break areas and cafeterias.

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In all of our geographies, we use on-site inspections and specific contractual terms to manage our supply chains to ensure compliance with environmental and social laws and regulations, as well as our policies in these areas, including with respect to human rights, child labor, slave labor and unsafe working conditions.

Telephonics requires that its subcontractors and suppliers periodically certify adherence to various Telephonics’ policies, such as those relating to human trafficking, corporate ethics and the prohibition of gratuities.

All significant AMES suppliers worldwide must periodically submit to a Factory Compliance and Capacity Assessment, which evaluates not only quality control and vendor capabilities, but assesses to what extent each supplier emphasizes environmental, labor and social considerations in the operation of its business.

All significant CPP suppliers worldwide must periodically submit to a Factory Compliance and Capacity Assessment, which evaluates not only quality control and vendor capabilities, but assesses to what extent each supplier emphasizes environmental, labor and social considerations in the operation of its business.

These activities have continued despite the travel difficulties caused by COVID.

In China, where AMES both operates a manufacturing facility and sources materials and products from third parties, AMES has dedicated compliance personnel who report directly into AMES’ Vice President and General Counsel.

In China, where CPP both operates a manufacturing facility and sources materials and products from third parties, CPP has dedicated compliance personnel who report directly into CPP’ General Counsels.

Honesty, transparency, and ethical practices have been ordinary course at Griffon for decades, and we continue to review and upgrade our programs in these areas.

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Our Corporate Governance Guidelines are published on our website.

While the guidelines require that a majority of directors be independent, currently all of our directors are independent except our CEO and our President (constituting over 85% of our directors).

Griffon has appointed a lead independent director and has four principal board committees - Audit, Compensation, Nominating and Corporate Governance, and Finance - each of which has its responsibilities set forth in a charter available on the Griffon website.

While the guidelines require that a majority of directors be independent, currently all of our directors are independent except our CEO (constituting over 92% of our directors).

Griffon has appointed a lead independent director and has four principal board committees - Audit, Compensation,

Nominating and Corporate Governance, and Finance - each of which has its responsibilities set forth in a charter available on the Griffon website.

We expect each of our employees around the world to work hard to deliver outstanding products to our customers and to deliver value to our shareholders.

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From 1999 to 2001, Managing Director at Dresdner Kleinwort Wasserstein, an investment banking firm, and its predecessor Wasserstein Perella & Co.

Member of the board of directors of Business Development Corporation of America and Franklin BSP Capital Corporation.

Member of the board of directors of Franklin BSP Capital Corporation, Franklin BSP Lending Corporation and Franklin Private Credit Fund.

Mehmel 60 Director since May 2018, President and Chief Operating Officer since December 2012.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business